Grant change in Sask. budget leaves Saskatoon short $11.4 million

Cuts to a grant program in Wednesday’s provincial budget are putting Saskatoon in an “immediate fiscal crisis,” Mayor Charlie Clark says.

The province cut the grant-in-lieu of taxes program from Crown corporations by more than half — or by about $35 million — which is leaving Saskatoon short $11.4 million.

“This is an $11.4-million hole in our operating budget for providing core services to citizens,” Clark said in a media release. “This amount is more than the cost of running all of our leisure facilities, or 25 per cent of our fire services budget, and close to the entire cost of snow and ice management in the city today.”

The grant-in-lieu program sees grants given out to 13 cities, based on the previous year’s tax notices, for civic infrastructure. The Crown corporations that will no longer be giving out grants, because of Wednesday’s budget, are SaskPower and SaskEnergy. About $29 million in grants from other Crowns will still be awarded.

More than 100 municipalities are affected by the change.

Prince Albert is losing more than $2 million. North Battleford is losing $1 million. Humboldt is losing $500,000, and Warman and Martensville are each losing $100,000.

Clark said Saskatoon’s loss isn’t accounted for in the current city budget, and city manager Murray Totland reiterated the statement.

“We've already made our budget decisions for 2017 and this comes at a point when we are already well into our yearly programming and service delivery for that budget,” Totland said. “We can’t just simply stop what we are doing and find $12 million at this point.”

The city was not consulted by the province ahead of the move, according to Clark.

“We were given no notice that this was on the table, no consultation, and no time to plan,” he said. The loss is equivalent to a 5.63 per cent tax increase.

City council is set to meet Sunday to discuss the provincial budget’s impact, and a report is expected Monday.

Cuts to city services or a tax hike may be considered, Clark said.

Joe Hargrave, the province’s Crown investments minister, confirmed Wednesday he did not speak to the cities ahead of the decision.

“I have not talked to the cities about it,” he said from inside the Saskatchewan Legislative Building’s rotunda after the budget was announced.

“It was just a measure that we made — that we had to make — to make sure to get the budget closer to balanced.”

Cities and municipalities must also help tackle the provincial deficit, he said.

“It’s their way of contributing to the deficit, to the tougher economic times that the government is facing.”

The province kept revenue sharing at one percentage point of the provincial sales tax in the budget, which will give Saskatoon $46.4 million in revenue sharing for its 2017 budget. The number is about $300,000 above what the city budgeted.

--- Editor's note: An earlier version of this story, quoting Mayor Charlie Clark, stated the $11.4-million drop is equivalent to a 5.7 per cent tax increase. New numbers released by the city Friday indicate the drop is equivalent to a 5.63 per cent increase.